One of the most important functions of the Consumer Financial Protection Bureau (CFPB) is to serve as an advocate for everyday consumers through its complaint reporting feature. The CFPB accepts complaints on its website about consumer problems with financial institutions and products at every stage of the process and helps consumers get results. Thanks to this feature, thousands of American consumers have already received resolution and relief from banks.
However, recent findings are also revealing some concerning trends.
According to a new report released this week by the National Community Reinvestment Coalition, consumers living in predominantly minority neighborhoods were disproportionately likely to submit complaints to the CFPB about problems with their banks. The report found that the banks studied were less likely to respond to complaints from minorities than they were for White consumers. Although neighborhoods that are majority Black or Hispanic constituted only 21% of all households studied, these neighborhoods accounted for 26% of all complaints about large banks. With over 17,000 complaints studied, this constitutes a significant racial disparity.
While these disparities by themselves do not prove discriminatory intent by banks, it raises concerns about the commitment of large financial institutions to responding to the needs of a rapidly growing segment of the market. NCLR’s financial access research shows that many Latino consumers are specific in what they want from a banking relationship but often have trouble finding one financial institution to meet all of their needs. What we don’t want is for people to drop out of the banking system and turn to costly or predatory financial services.In the wake of the Great Recession, which has diminished the wealth of Latino households across America and resulted in the closing of bank branches located in communities of color, these indicators underline the essential role that the CFPB can play in identifying issues and resolving challenges between bank and consumer. The complaint portal is much needed in our community, and all Latino consumers facing difficulties should consider using it.
Although Latinos may be disproportionately affected by problems with their banks, the Consumer Financial Protection Bureau has proven competent in resolving complaints with banks in its short history. We know banks must increase their commitment to providing quality service to our community, but when customer services fails, it’s good to know that a third party is here to help.
Have you ever used the CFPB’s complaint reporting feature? If not, try it out now!